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Comptroller’s Report Critical of Little Falls Management, City Agrees with Assessment

Kristine Bellino, WIBX

City leaders in Little Falls are making assurances that problems will be corrected but not before the Office of the State Comptroller made public the results of an audit of the city.

Specifically addressed were “internal controls over the Treasurer’s Office and accountability over water operations” from the period ranging from January 1, 2011 through July 31, 2012.

Highlights from State Comptroller Thomas DiNapoli’s Audit Results are summarized as follows:

The Council and Treasurer have not ensured adequate internal controls are in place over cash receipts and disbursements handled by the Treasurer’s Office.  The Treasurer did not perform adequate bank reconciliations and did not record all financial transactions accurately, completely, timely, and in a clear and transparent manner.  In addition, there is not adequate segregation of duties within the Treasurer’s Office…While our sample testing did not identify fraudulent activity, the degree of unsupervised control that the Treasurer was permitted to have over the City’s financial activity has not only resulted in inaccurate accounting records and reports, but also created a risk that funds could be misappropriated and improper activities easily concealed…(T)he City is losing 54 percent of the water it distributes, which is substantially higher than the EPA goal [of ten percent for unaccounted-for water losses].  In 2011, the City reported that 719 million gallons of water was treated and 331 million gallons were delivered or used, leaving 388 million gallons of unaccounted-for water.  The cost of unaccounted-for water for 2011 is about $265,000.  Unaccounted-for water creates a production expense for the City for which there is no revenue.

A link to the full report is here.

It is important to note that the audit states that absolutely no illegal activity was found, acknowledging only the potential for it. It could also be viewed as a credit to the city’s leadership that no one has apparently taken advantage of the lack of internal controls. Additionally, the state found that the City of Little Falls, and specifically its Board of Public Works, is not adequately overseeing its water services to approximately 1,700 metered customers.

For their part, according to the report, city officials “generally agreed” with the recommendations of the Comptroller’s Office and “indicated that they plan to initiate corrective action.”  In a letter included in the audit results report addressed to DiNapoli, Mayor Robert J. Peters, Sr., says, “You have my assurance that these corrective recommendations will be followed in a timely manner.”

(NOTE: WIBX has reached out to Mayor Peters for a more detailed comment during irregular business hours and hope to speak with him later this morning.)

 

Kristine Bellino, WIBX

 

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